Topic: How to negociate on a lease?

[S60]

Yes indeed, high rates, Saab's big promo is the the 9-3 model this month, 0.9% 3 year financing.

Saab has sold only 1,350 of the 9-2 model in the United States, so no wonder you have not seen any in Canada. I still have not seen a 9-2 on the road
in Ontario.

[EV-Light]

Froggy thats what i was thinking...
u'd better forget the Saab and jump into a volvo

[neil]

Froggy, jumping in late, looks like most of your questions were answered.  One thing you mentioned about negotiating the selling price and the effect of residual value.

The residual value is calculated based on msrp.  so regarless of what the selling price is, the residual should stay the same as a % of msrp.  Example $40k msrp vehicle, 50% residual $20k.  if your selling price was $40k, your amount to be amortized is $20k.  
Or
$40k msrp, 50% residual, $20k.  Your selling price is $35k, amortized amount $15k.

[johngenx]

I saw a 9-2X!  One!  About a week ago.  Very "Subaruy" (of course) but the Saab front looked good.

It had a dealer plate on it, so I can't be sure if even one has been sold here.

[Froggy]

One last question about leasing:
At interest rate equal for financing and leasing and assuming the residual value is pretty accurate (ie the car is roughly worth what the leasing company said it would be), the cost of leasing would be less because you only pay taxes on the amount you amortize. Am I right or am I missing something here?
And how hard is to walk away from a leasing?
Are you liable for the whole remainder if you have let's say 10 months left and you cannot find somebody to take over your lease or is it a 2 months penalty and then you can return the car?
Once again, thanks for all the help, you guys are very helpful and knowledgable.

Alban

[S60]

The monthly payment is based on the amount the vehicle will depreciate over the lease term (the total price including freight & PDI minus any trade-in and/or downpayment and the residual value of the vehicle at the end of the lease), upon which the monthly interest is added. Then, added to this is the monthly interest on the residual value (calculated at the same finance rate). Taxes are paid on the monthly payment rather than on the full cost of the vehicle


Yes you are liable for all lease payments specified in your lease agreement/contract.

(Message edited by S60 on December 09, 2004)

[Sterling]

How hard is it to walk away from a lease? It's easy. It just takes money - same as if you financed it.

I've mentioned this before but it bears repeating. People often talk about being "locked" into a lease whereas you can get out of a finance contract at any time. This statement is technically true, but it is practically false. I don't care whether you are in a 3 year lease, a 60 month finance, or paid cash, they will all cost you money to get rid of the car after, say, 1 year.

[neil]

Froggy, to your question of total cost lease vs buy if the interest rate is the same.

You are financing less on the lease, without the taxes, which saves on some interest, but also consider that your financed amount is higher through most of the lease.  I have run this option many times and it is almost a total cost wash, with the purchase coming out slightly ahead.

[Ghost]

I've seen a few 9-2 and 9-2x. It seemed to have more road presence than a regular wrx wagon. I wonder if the owners know it's not a true Saab. Then again, are there any true Saabs left what with the platform-sharing orgy that GM is having.

(Message edited by ghost on December 10, 2004)

[ovr50]

I agree with Neil above. I have leased about 6 times and each time I did a detailed cost analysis of purchase vs. lease as to total outlay. In each case, the lease came out slightly more costly than the purchase. For me, the peace of mind with the lease and not having to pay govt. taxes up front, makes the lease work for me even if slightly costlier. YMMV.

[Froggy]

Yes Neil, I hsave played with the numbers myself (I love Math!) and I ran 2 scenarii on a S40 @ $39000 before tax (Why are taxes not included ) with a 3.8% financing and leasing rate (as it is now).
In the case of the lease, with $3000 down, over 48 months it comes down to 560 a month (with tax)
for a buyout of roughly $20.000 (with tax) at the end.
To compare it, I crunched the numbers with a downpayment of $23.000 (20.000 from buyout + 3.000 from downpayment in leasing scenario) and a financing over 48 months, the monthly payment amounted to 520 roughly...
Therefore the overall difference between the 2 if you buy the car once the lease is over is 48 months * (560-520)=1920$.  
Is that right?

[Froggy]

I hav the same feeling as you Ovr50 +the extra 20.000 I would not have to pay right away (and I am not even sure I'd buy the car anyway after the lease) in the case of leasing could be used in something more useful as the financing of the oncoming wedding...

[safristi]

Not to mention the 5,000 tadpoles...